249 Talking to Kids about Financial Stress

Based on research done by: Scaramella, Laura V., Neppl, Tricia K., & et al. (2008). Written by: American Psychological Association, adapted by Juanita N Baker, Ph.D.

Financial worries can have a devastating long-term impact on younger children. In one study, children whose families faced economic hardship during their adolescence not only became parents themselves earlier than their peers but also treated their own children more harshly.

While open communication between parents and children is the foundation of a healthy relationship, parents, don’t overburden your children. Because young children may interpret the situation as direr than it actually is, address problems at age-appropriate levels. What you tell a younger child about the family’s financial situation should be different than what you tell an adolescent. Be sure to address their fears. Older children and teens, who have more exposure to the news, may find it reassuring to discuss their understanding of the economy and its implications for the family.

Be mindful of how you phrase things. How parents talk about their worries about the financial situation influences a child’s interpretation. Younger children may overhear statements such as “We’re going to the poor house” and take them literally. Talk to your children. Ask them for their thoughts and ideas. Listen to their concerns. Clear up any misunderstandings and address all their worries.


Scaramella, Laura V., Neppl, Tricia K., & et al. (2008). “Consequences of socioeconomic disadvantage across three generations: Parenting behavior and child externalizing problems.” Journal of Family Psychology, 22 (5), 725-733.

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